The thorny issue of court fees

For those not familiar with the court system, the sheer expense of court fees can be a surprise. In a substantial case, court fees can be £10,000 to issue proceedings plus a further £1,000 or so for the hearing. Each application comes at a cost. Court fees in a complex case can easily total £12,000 to £13,000. This is a substantial cost.

For those in receipt of some benefits there is a fee remission system but for those of us who work with that system it can prove to be at best tricky and at worst a danger to sanity.

It is certainly true that if the fee exemption form is completed correctly and sent to the Central County Court there is a more than 50% chance that the fee will be remitted and funds will be returned. If the form is taken to the High Court the prospects of success are substantially reduced. There is no apparent explanation for this.

Traditionally at the conclusion of the case it is always raised by unsuccessful defendants that the court fee should have been remitted and therefore should not be reimbursed by the losing party because the claimant may be on benefits or not have an income. Typically defendants do not always take into account the sheer amount of work that can be involved in an application for exemption and remission.

A recent case in the County Court called Cook v Malcolm Nicholls Ltd involved the ruling of a deputy district judge in relation to the issue of the court fee. The court fee was £10,000 and the defendant had argued that the court fee was neither reasonable nor proportionate. Further the defendant had argued that the claimant would have been entitled to a fee remission. She was not employed at the time the fee was incurred and her partner also had difficult financial circumstances. It appears therefore that she was eligible to put in an application for fee remission and the argument was that the claimant’s solicitors did not apply for it which was unreasonable.

The defendant argued that the court fee was not a disbursement in the normal sense because that remission was available. They used the “sensible” solicitor test which as been accepted in a number of cases.

The deputy district judge was not convinced by this argument. The judge was not convinced that the defendant had the right to question the retainer between the claimant and solicitors in any event or the advice given by the claimant’s solicitors to the claimant. The deputy district judge held that the court fee was simply that, a court fee. The court service had to operate. In short ,regardless of whether it could have been remitted, it was payable by the defendants.

There is some additional support for this albeit somewhat laterally. In Peters v East Midlands Strategic Health Authority [2010] QB48 the issue in relation to costs was considered parallel to that of damages. In damages a claimant is entitled to seek private healthcare even if available on the NHS. In that case, the judge considered that there was no reason why there should be a difference in relation to costs. The claimant was entitled to decline the right to use a fee remission and was entitled to chose to pay the court fees if they so wished. If they so wished they were entitled to recover them from the other party.

It is obvious that there will be more and significant challenges to this decision not least of which because the decision in Cook is one of a deputy district judge. Nevertheless it is a useful start for an argument that it cannot possibly be the case that there has to be an application for the fee exemption in all circumstances. The reality is that an application for a fee exemption can in some circumstances incur costs more than the fee paid to the court in the first place.

Claimant solicitors should not rely on being able to recover from defendants in all circumstances but where there is a need to try and do so, there are at least a couple of cases in support.

It is useful to see that the court has looked at the administrative issues that go with the system, the size of fee and considered that it is simply a cost which the paying party should bear at the conclusion of the case. No doubt in due course there will be further and significant challenges to this idea but it is some help for claimants given the ongoing onslaught on the issue of costs and costs recovery.

*Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*